Moral agency as victim of the vulnerability of autonomy

This paper draws upon a research study of accountants and HR specialists. The study eschewed hypothetical scenarios and focused upon those situations and scenarios that the interviewees defined as causing them ethical concerns. There are two distinct but related issues arising from the paper. The first is that the singular categorisations of moral reasoning attributed to individuals when faced with hypothetical scenarios by many who write on the issue of moral reasoning, did not correspond to the fluidity in moral choices faced by the interviewees as they experienced their unfolding moral dilemmas. The second issue relates to the unwillingness of the interviewees to give voice to their concerns, not only externally, but also within their employing organisations. The tensions within the two cases featured were held in check only by the diminution of the autonomy of the two principal actors. As a consequence, the exercise of moral agency was denied.     

Capital structure and the control of managerial incentives

We present a theory of capital structure based on the power of shareholders, bondholders and managers to control the incentive conflicts in large corporations. The manager–owner conflict produces a trade-off between inefficiency in the low state and rents in the high state, and the shareholder–bondholder conflict produces under-investment as in Myers [Journal of Financial Economics 19 (1997) 147]. Since managers and bondholders both prefer more efficient actions in the low state, the two conflicts are interdependent. With risk-less levels of debt, there are no shareholder–bondholder agency costs, but managerial control over the incentive-setting process produces excessive rents. With risky debt, shareholders focus more on returns in the high state so that shareholder–bondholder agency costs increase but managerial rents decrease. Efficient levels of debt holder protection facilitate a reduction in manager–owner agency costs that outweighs shareholder–bondholder agency costs, and are decreasing in firm performance. The results are consistent with the separate empirical results relating control to both compensation and leverage, and suggest how future studies can be integrated.     

Cap and trade policies in the presence of monopoly and distortionary taxation

We extend an analytical general equilibrium model of environmental policy with pre-existing labor tax distortions to include pre-existing monopoly power as well. We show that the existence of monopoly power has two offsetting effects on welfare. First, the environmental policy reduces monopoly profits, and the negative effect on income increases labor supply in a way that partially offsets the pre-existing labor supply distortion. Second, environmental policy raises prices, so interaction with the pre-existing monopoly distortion further exacerbates the labor supply distortion. This second effect is larger, for reasonable parameter values, so the existence of monopoly reduces the welfare gain (or increases the loss) from environmental restrictions.     

On the Statistical Significance of Event Effects on Unsystematic Volatility

We develop a method for determining the significance of the effect of a certain event (stock split, corporate restructuring, change in regulation, etc.) on unsystematic volatility of asset returns. Simulations show that the suggested tests reject the true null hypothesis of no effect on volatility at appropriate levels, whereas the rejection rates of a false null hypothesis increase with the magnitude of the effect. An application of the method to corporate spin‐offs reveals statistically significant and long‐lasting estimated increases in unsystematic volatility of parent companies' returns.     

Nonlinear dynamics and competing behavioral interpretations: Evidence from intra‐day FTSE‐100 index and futures data

Extant empirical research has reported nonlinear behavior within arbitrage relationships. In this article, the authors consider potential nonlinear dynamics within FTSE‐100 index and index‐futures. Such nonlinearity can be rationalized by the existence of transactions costs or through the interaction between informed and noise traders. They consider several empirical models designed to capture these alternative dynamics. Their empirical results provide evidence of a stationary basis term, and thus cointegration between index and index‐futures, and the presence of nonlinear dynamics within that relationship. The results further suggest that noise traders typically engage in momentum trading and are more prone to this behavior type when the underlying market is rising. Fundamental, or arbitrage, traders are characterized by heterogeneity, such that there is slow movement between regimes of behavior. In particular, fundamental traders act more quickly in response to small deviations from equilibrium, but are reluctant to act quickly in response to larger mispricings that are exposed to greater noise trader price risk. © 2006 Wiley Periodicals, Inc. Jrl Fut Mark 26:343–368, 2006     

Emotional and interpersonal competencies and leader development

A variety of recent leader development programs have focused on improving leaders' emotional and interpersonal competencies. Decades of leadership research suggest that these “people skills” are crucial for leader effectiveness. This paper reviews the history of these leader development programs as well as research on emotional and interpersonal competencies. Suggestions for grounding leader development programs in sound research on emotional and social competencies, as well as an agenda for future research on the development of leader emotional and interpersonal skills, are provided.     

Harmonizing the interests of a city and its region: Krasnoyarsk krai experience

The paper focuses on the emerging system of territorial strategic planning in the constituent entities of the Russian Federation and municipalities. Suggested for practical application are the best Russian research studies and practices of coordinating the interests of municipal and regional authorities. The analysis of scholarly approaches to the issue in focus allows one to infer that the best elaborated position is that of the staff of the North-Western Office of the Russian Research Center for Local Governance (RRCLG). As regards the express-analysis of practices adopted in the number of the Russian Federation constituent entities, the practices of the Krasnodar krai appear to be the most promising.